What changed in this filing

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Item 1. Business

2025-02-27 compared with 2024-02-29 · 70 added, 74 removed, 42 unchanged (77% of the section changed)

Company Overview

Inuvo is an advertising technology and services business selling information technology solutions to brands, agencies and large consolidators of advertising demand (“Platforms”).

Inuvo’s revenue is derived from the placement of digital advertising throughout devices, websites, applications and browsers across social, search and programmatic advertising channels.

Inuvo facilitates, and gets paid, to deliver millions of advertising messages monthly and counts among its client's numerous world-renowned companies across industries.

Inuvo’s primary mission is to disrupt the advertising industry with its proprietary and patented generative large language artificial intelligence (AI), a technology capable of identifying and targeting audiences without using a consumer’s identity or data.

The AI was designed to replace the consumer data, analytics, segmentation and lookalike modeling technologies that have traditionally served the advertising industry as it transitions to a new paradigm where a consumer’s identity and data are no longer available for advertising decisions due to legislative and technological changes.

Rather than targeting people, the AI targets the reasons behind why people are interested in products, services and brands.

The advertising industry Inuvo serves is going through an unprecedented change the likes of which has never occurred with the potential to disrupt the over $600 billion dollars in annual worldwide digital media spend that supports the internet.

Inuvo is a leading advertising technology and services business that has successfully developed and commercialized large language generative artificial intelligence that can discover and target digital audiences instantly without having to track consumers around the internet.

Inuvo’s innovative technology positions it as a leader within the advertising industry, offering a valuable solution to marketers seeking to navigate the evolving landscape of consumer privacy.

Rather than targeting people, the artificial intelligence (AI) targets the reasons behind why people are interested in products, services and brands.

Inuvo’s primary mission is to disrupt the advertising industry with its proprietary and patented artificial intelligence, a technology capable of identifying and targeting audiences without using a consumer’s identity or data.

The AI, marketed as IntentKey was designed to replace the consumer data, analytics, segmentation and lookalike modeling technologies that have traditionally served the advertising industry as it transitions to a new paradigm where targeting based on a consumer’s identity and data are no longer possible due to the legislative and technological changes occurring.

The advertising industry Inuvo serves is going through an unprecedented change, the likes of which has never ensued with the potential to disrupt hundreds of billions in annual worldwide digital media spend that supports the internet.

The cornerstone of the change revolves around the use of a consumer’s identity and data for ad-targeting.

While there are many ways to identify consumers, the principal method that has evolved within the browsers has been the cookie, which is the location within the browser where a consumer's identity gets stored.

When the cookie is no longer available, the means to lookup a consumer’s personal information in a database is no longer possible.

When the cookie is no longer available, the means to look up a consumer’s personal information in a database is no longer possible.

No Targeting.

Thirteen states have now signed consumer privacy legislation and another 17 have privacy bills in process.

Apple has already eliminated the use of cookies within its browser and Google began phasing them out in January of 2024.

Inuvo’s AI technology solves this challenge and can be consumed by clients both as a managed service and software-as-a-service.

For certain clients, Inuvo has also developed various proprietary technology and assets that include digital content, websites, automated campaigns, fraud detection, performance reporting and predictive media mix modeling.

There are many barriers to entry associated with the Inuvo business model, including a proficiency in large language model based artificial intelligence, large scale information processing, software development, consumer data products, analytics, IOT (internet of things) integration and the relationships required to execute within the IOT.

In 2023, Inuvo delivered roughly 11.27 billion ads.

Inuvo’s intellectual property is protected by 19 issued and eight pending patents.

Products and Services

The Inuvo products and services use analytics, data and artificial intelligence in a manner that optimizes the purchase and placement of advertising in real time.

Nineteen states have now signed consumer privacy legislation and another 10 have privacy bills in process.

Apple has already eliminated the use of cookies within its browser and Google is expected to announce its phase out of cookies in 2025.

Inuvo’s AI technology solves this identity challenge by leveraging artificial intelligence, data analytics, and automation that can optimize the purchase and placement of advertising in real time without consumer data.

Inuvo clients, who are agencies and brands (collectively, “Agencies & Brands”) and large consolidators of advertising demand (“Platforms”) both benefit from Inuvo’s ability to intelligently process vast amounts of data, detect patterns in behavior, and enhance advertising efficiency, whether through direct media execution or integration into existing campaign management systems.

These capabilities are typically sold with services both individually and in combination with each other based on client needs.

These products and services include:

An artificial intelligence-based consumer intent recognition system designed to reach highly targeted mobile and desktop In-Market audiences with precision.

Agencies & Brands utilize our artificial intelligence-based consumer intent recognition system to reach highly targeted mobile and desktop In-Market audiences with precision.

The solution can serve multiple creative formats including display, video, audio and native across multiple device types including desktop, mobile, tablet, connected/smart TV and game consoles.

The product is sold as both a fully managed service and/or a software as a service solution;

A marketing and advertising solution which can be provided directly to brands and where a collection of data, analytics, software and publishing is used to align advertising messages with consumers across websites online.

The solution includes an integration to numerous media placement partners such as Facebook, TikTok, Twitter, Google, Microsoft, Yahoo, and others.

The product is sold as a service.

Bonfire is a rebranding of both Validclick and Campsight, which the company has historically used.

The technology can be consumed by clients as a managed service or self-service (SaaS).

For our Platform clients we utilize a collection of data, analytics, software, content management and website creation technologies to align merchant advertising messages with online content.

Inuvo’s revenue is derived from the placement of digital advertising across devices, websites, applications and browsers within social, search and programmatic advertising channels.

Inuvo facilitates and gets paid to deliver millions of advertising messages monthly and counts among its client's numerous world-renowned companies across industries.

Inuvo generates revenue from Agencies & Brands through its fully managed and self-service offerings, both of which utilize IntentKey, and through the placement of advertising on third-party publisher and owned websites designed to meet Platform client requirements.

There are many barriers to entry associated with the Inuvo business model, including proficiency in large language model based artificial intelligence, large scale information processing, software development, consumer data products, analytics, IOT (internet of things) integration and the relationships required to execute within the IOT.

Inuvo’s intellectual property is protected by 19 issued and eight pending patents issued by the United States Patent and Trademark Office (“USPTO”).

Key Relationships

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We maintain multi-year service contracts with these companies.

In addition to our Platform relationships, we support agencies and brands.

In addition to our Platform relationships, we support Agencies & Brands.

Additionally, we maintain important distribution relationships with owners and publishers of websites and mobile applications.

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We continuously monitor our advertising quality with a variety of proprietary and patent protected software tools.

In 2023, we had two individual customers with revenue concentration greater than 10% of our total revenues accounting for 60.4% and 12.8%, respectively.

In 2022, we had three individual customers with revenue concentration greater than 10% of our total revenue accounting for 29.1%, 24.1%, and 12.9%, respectively.

Our business strategy has been to develop advertising technologies that can displace intermediaries within the online advertising ecosystem, while cultivating relationships that can provide access to media spend (advertisers) and media inventory (websites).

In this regard, we have proprietary demand (media spend) and supply (media inventory) technologies, targeting technologies, application ad-unit technologies, proprietary AI generated data and data management technologies, and advertising fraud detection technologies.

Our goal is to become the engine that powers an advertising transaction decision not the platform that facilitates the advertising placement.

Bonfire mitigates market risk by being contracted with some of the largest advertising Platforms in the world.

Consequently, Bonfire has the potential to scale faster than the typical advertising technology company while concurrently adapting to industry changes when they are led by these Platforms.

Bonfire has strong working capital, requires limited go-to-market investments, and has very low receivables risk.

The Bonfire strategy is to scale existing clients while integrating the IntentKey technology to realize competitive advantages.

IntentKey is a highly differentiated and proprietary technology aligned with the most advanced form of artificial intelligence in the world, large language generative AI.

IntentKey scales at high margins and displaces entrenched incumbents across the advertising value chain.

The technology is revolutionary not derivative, designed specifically to provide advertisers a solution to the changes that impact the very fabric of the internet including third party cookies, first party cookies, IP addresses, URL tracking, media measurement, utilization of consumer data, segmentation of audiences, retargeting of consumers, identity management and more.

The IntentKey was designed to fill the void that will result from hundreds of legacy companies whose technology was built around and requires methods based on user targeting.

The strategy is to embed this technology as broadly as possible while the industry transitions.

As part of our growth strategy, we evaluate acquisition candidates from time to time as opportunities arise with a focus on companies that have either advertisers or advertising relationships we do not possess or publishers or publishing partners who have content we do not possess.

In 2024, we had one individual customer with revenue concentration greater than 10% of our total revenues accounting for 75.0%.

In 2023, we had two individual customers with revenue concentration greater than 10% of our total revenue accounting for 60.4% and 12.8%, respectively.

Our business strategy focuses on developing cutting-edge advertising technologies that disrupt the traditional intermediaries within the online advertising ecosystem, while fostering strong relationships that enable access to both media spend (advertisers) and media inventory (websites).

We leverage proprietary demand and supply technologies, targeting and application ad-unit technologies, AI-generated data, data management solutions, and advertising fraud detection systems.

Our overarching goal is to be the driving engine behind advertising transaction decisions, rather than simply facilitating the ad placement process.

Our Platforms business mitigates market risk by partnering with some of the largest advertising platforms globally.

This enables our business to scale rapidly, particularly as these platforms lead industry changes.

With strong working capital, low receivables risk, and minimal go-to-market investment requirements, our Platforms business is well-positioned for growth.

Our strategy within the Platforms sector is to deepen existing relationships, expand our footprint with current clients, and integrate emerging technologies from our Agencies & Brands business to enhance our competitive advantage.

Agencies & Brands:

The Agencies & Brands business leverages our proprietary AI-driven technology to solve key challenges in modern advertising.

IntentKey technology, built on the foundation of large language generative AI, is designed to displace entrenched incumbents across the advertising value chain.

This revolutionary technology addresses critical issues such as third-party cookies, first-party cookies, IP addresses, URL tracking, audience segmentation, media measurement, and identity management.

The strategy is to embed our technology as broadly as possible across the industry particularly as it transitions away from legacy targeting methods used by traditional advertising solutions.

As part of our growth strategy, we continuously evaluate potential acquisitions, with a focus on companies that offer access to new advertiser relationships, media inventory, or publishing content that complements our existing capabilities.

Sales and Marketing

We drive general awareness of our brands through various marketing channels including our websites, social media, blogs, public relations, trade shows and conferences.

Sales and marketing for our products differs based on whether they are demand or supply facing.

The demand side of our business includes sales executives who create interest from agencies, trading desks, brands, and Platforms directly.

Leveraging our various capabilities to highlight our differentiation, our sales executives explain how we identify the most relevant audiences so we can, on behalf of our clients, target those audiences at a time when they are most prone to engage / respond / subscribe / tune-in or watch our clients' message.

The supply side of our business includes relationships with and integrations to media placement partners that make available for auction, advertising inventory for Inuvo clients.

We pay a fee to these partners for this service.

Within Bonfire, unique technologies and content experiences can be created in a manner that aligns with the objectives of our Platform clients.

We face significant competition in our industry.

Competitors continue to increase their suite of offerings across marketing channels to better compete for total advertising dollars.

There are many barriers to entry to Inuvo’s business that would require proficiency in large scale data center management, software development, data products, analytics, artificial intelligence, integration to the internet of things, or IOT, the relationships required to execute within the IOT and the ability to process tens of billions of transactions daily.

We compete, both directly and indirectly with companies who offer demand side platforms, direct marketing platforms, data suppliers and aggregators, media planners and various measurement and analytics companies.

We drive awareness of our brands through a variety of marketing channels, including our websites, social media platforms, blogs, public relations efforts, trade shows, and conferences.

Our sales and marketing strategies differ depending on whether the focus is demand-side or supply-side.

On the demand side, our sales team engages directly with agencies, trading desks, brands, and platforms to generate interest.

By leveraging our advanced technologies and unique capabilities, our sales executives demonstrate how we identify the most relevant audiences and target them at optimal moments when they are most likely to engage, respond, subscribe, or consume our clients’ messaging.

On the supply side, we build and maintain strong relationships with media placement partners who provide advertising inventory for auction to Inuvo’s clients.

We compensate these partners for their services.

Within our Platforms business, we offer unique technologies and content experiences that align with the objectives of our platform clients, allowing us to meet their specific needs effectively.

We operate in a highly competitive industry, where competitors are continuously expanding their product offerings to capture a larger share of the advertising market.

While there are numerous barriers to entry in Inuvo’s business—such as the need for expertise in large-scale data center management, software development, data products, analytics, artificial intelligence, and integration with the Internet of Things (IoT) we are well-positioned to maintain our competitive edge.

Our ability to process tens of billions of transactions daily further differentiates us in the marketplace.

We compete, both directly and indirectly, with companies offering demand-side platforms (DSPs), direct marketing platforms, data suppliers and aggregators, media planners, and a range of measurement, attribution and analytics companies.

Our primary competitive advantages include:

patented, proprietary generative large language artificial intelligence technology for the categorization of consumer intent (data generated to match online audiences to product, service or brand);

real time visibility of advertising opportunities where our technology is capable of responding to over a million such opportunities per second;

and patented advertising fraud prevention.

Many competitors have greater name recognition and are better capitalized than we are.

Our ability to remain competitive in our market segment depends upon our ability to be innovative and to efficiently provide unique solutions to our demand and supply customers.

There are no assurances we will be able to remain competitive in our markets in the future.

patented, proprietary generative large language artificial intelligence technology for the categorization of consumer intent, enabling us to match online audiences to relevant products, services, or brands across screens;

real-time visibility into advertising opportunities, allowing our technology to respond to over a million opportunities per second;

patented advertising fraud prevention technology that safeguards our clients’ investments.

While many of our competitors have greater name recognition and larger financial resources, our ability to stay competitive depends on our innovation and ability to deliver unique, effective solutions to both demand and supply-side customers.

However, there are no guarantees that we will be able to maintain this competitive positioning in the future.

Inuvo Technology Platforms

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By seeking to strike the proper balance between using commercially available software and open-source software, our technology expenditures are directed toward maintaining our technology platforms while minimizing third-party technology supplier costs.

We strive to build high-performance, availability and reliability into our product offerings.

We safeguard against the potential for service interruptions at our third-party technology vendors by engineering controls into our critical components.

We deliver our hosted solutions from facilities, geographically disbursed throughout the United States and maintain ready, on-demand services through third-party cloud providers Microsoft Azure and Amazon Web Services to enhance our business continuity.

Our applications are monitored 24 hours a day, 365 days a year by specialized monitoring systems that aggregate alarms to a human-staffed network operations center.

If a problem occurs, appropriate engineers are notified, and corrective action is taken.

We are committed to building high-performance, reliable, and highly available product offerings.

To mitigate the risk of service interruptions caused by third-party technology vendors, we incorporate engineering controls into our critical components to ensure consistent service delivery.

Our hosted solutions are provided from geographically distributed facilities across the United States, complemented by on-demand services from third-party cloud providers, Microsoft Azure and Amazon Web Services (AWS), to support business continuity and enhance operational resilience.

Our applications are monitored around the clock, 365 days a year, through specialized monitoring systems that aggregate alerts to a human-staffed network operations center.

In the event of an issue, engineers are promptly notified, and corrective actions are swiftly implemented to minimize disruptions and ensure continuous service availability.

Intellectual Property Rights

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federal registration for our consumer facing brand ALOT® in the United States.

Our intellectual property portfolio includes 19 patents issued by the United States Patent and Trademark Office (“USPTO”) and eight pending patent applications.

Our intellectual property portfolio includes 19 patents issued by, and eight pending patent applications before, the USPTO.

To distinguish our products and services from our competitors’ products, we have obtained trademarks and trade names for our products.

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As of January 31, 2025, we had 82 full-time employees, none of which are covered by a collective bargaining agreement.

Human capital management is critical to Inuvo’s ongoing business success, which requires investing in our people.

Our aim is to create a highly engaged and motivated workforce where employees are inspired by leadership, engaged in purpose-driven, meaningful work and have opportunities for growth and development.

We are an equal opportunity employer and we are fundamentally committed to creating and maintaining a work environment in which employees are treated with respect and dignity.

All human resources policies, practices and actions related to hiring, promotion, compensation, benefits and termination are administered in accordance with the principles of equal employment opportunity and other legitimate criteria without regard to race, color, religion, sex, sexual orientation, gender expression or identity, ethnicity, national origin, ancestry, age, mental or physical disability, genetic information, any veteran status, any military status or application for military service, or membership in any other category protected under applicable laws.

An effective approach to human capital management requires that we invest in talent, development, culture and employee engagement.

We aim to create an environment where our employees are encouraged to make positive contributions and fulfill their potential.

We instill our core values of innovation, encouragement, motivation, and curiosity with our employees to instill culture and create this environment of growth and positivity.

Our Board of Directors is also actively involved in reviewing and approving executive compensation, selections and succession plans so that we have leadership in place with the requisite skills and experience to deliver results the right way.

Human capital management is a key driver of Inuvo’s long-term success, and we are dedicated to investing in our workforce.

Our goal is to cultivate a highly engaged, motivated team where employees are inspired by strong leadership, feel connected to purpose-driven and meaningful work, and have ample opportunities for growth and professional development.

As an equal opportunity employer, we are committed to fostering a respectful and inclusive work environment where all employees are treated with dignity.

Our human resources policies and practices—including those related to hiring, promotion, compensation, benefits, and termination—are designed and administered in line with equal employment opportunity principles and other applicable criteria, without regard to race, color, religion, sex, sexual orientation, gender identity or expression, ethnicity, national origin, age, disability, genetic information, veteran or military status, or any other category protected by law.

Our approach to human capital management emphasizes the importance of talent investment, development, and engagement.

We strive to create a culture where employees are empowered to contribute positively and reach their full potential.

We promote our core values of innovation, encouragement, motivation, and curiosity, which help shape our workplace culture and foster an environment of growth and positivity.

Additionally, our Board of Directors plays an active role in overseeing executive compensation, succession planning, and leadership development to ensure that we have the right leadership in place with the skills and experience needed to drive sustainable success.

Our future results of operations may be subject to fluctuation because of seasonality.

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In 2013, with a grant funded by the State of Arkansas, the Company moved its headquarters to Arkansas where it has remained.

In February 2017, the Company entered into an asset purchase agreement with NetSeer, Inc.

which advanced the Company's artificial intelligence technology and Platform integration strategy.

In February 2017, the Company entered into an asset purchase agreement with NetSeer, Inc., which advanced the Company's artificial intelligence technology.

The origins of the AI technology behind the IntentKey is the machine learning labs of the University of California Los Angeles (UCLA) where a professor and his doctorate students were tasked to develop a form of artificial intelligence that was a first of a kind of an unstructured data graph representing the world's knowledge.

The project was eventually funded by a Silicon Valley venture firm before being acquired by Inuvo.

Since 2017, Inuvo has invested millions of dollars in developing and enhancing the technology.

More Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business